One of the oldest builders in the Chicago area says it plans to expand into surrounding states with active-adult developments aimed at buyers 55 and older.
Burnside Homes, which is based in Downers Grove and has been operating since 1911, is giving up building houses for all ages to focus on developments of 100 to 200 homes with a clubhouse, a pool and supervised activities for aging Baby Boomers.
The company has approval for the first of its new adult-targeted “Traditions” developments, a 107-home project in Olympia Fields. Two other projects, in Waukegan and Elgin, are awaiting approval.
In addition, the company controls property in Michigan and Wisconsin for future projects and is scouting for land in the St. Louis area, said Peter Goergen, executive vice president of sales.
The firm anticipates breaking ground on one out-of-state development within the next year. It anticipates building 6 to 12 Traditions projects in the Chicago area and up to 20 outside the area within 10 years.
“We are continuing to chase the Baby Boomers,” said Goergen. Competition for housing is so intense “you can’t build in a field” anymore and expect buyers to come, he said.
The huge post-World War II demographic group has fueled consumer trends for decades. With an estimated 10,000 people turning 55 every day, Burnside is by no means the only local builder eyeing the Boomers.
Unlike Del Webb Corp., the active-adult pioneer that built destination developments of a thousand homes or more and is now part of Michigan-based Pulte Homes Inc., Burnside plans projects of no more than 200 homes that are much closer to home.
“Our model is to go where the people are,” Goergen said. “Our research is that people don’t want to make the big move to Arizona and Florida,” but that they do want to step away from the responsibility of yard work and big homes, he said.
Goergen said company officials believe prospective buyers are willing to move within a 10- to 15-mile radius of their current homes. New Jersey, for example, has more than 100 active-adult communities, he noted. Those projects appeal to people who do not want a new city but may want “a new neighborhood,” he said.
As a result, Goergen said Burnside is identifying desirable demographic hot spots first and then buying land, reversing an old pattern where large land tracts were assembled first.
In age-restricted housing, one resident must be 55 or older and no permanent resident under 19 is allowed.
Although all Traditions developments are age-restricted now, Burnside is open to the possibility of so-called age-targeted developments, depending on the municipality’s wishes, Goergen said. Age-targeted projects have no age restrictions but are designed to appeal mostly to empty nesters.
The developments are popular with municipal officials because they add to the tax rolls but do not make demands on schools, add much traffic during rush hour or extend sprawl because of the clustered housing, Goergen noted.
Burnside is completing developments for all ages at Lakemoor Farms in north suburban Lakemoor and Madison Place in Skokie, and it was the developer of the Belmont River Club on Chicago’s Northwest Side.
But Goergen said the company began retooling as a 55-plus specialist three years ago. “Our business model is draw a circle of a 300- to 400-mile radius around Chicago, about one day’s travel time,” Goergen said. “We have a certain way of doing things and we are going to try to replicate it.”
The firm built 200 homes a year until it began the strategic shift, Goergen said. Burnside expects to build 100 active-adult units and 30 conventional homes in 2004. It projects building 200 to 250 adult units and 50 conventional homes in 2005.
